Monday, January 24, 2011

A Coal Myth and a Question of Fiscal Responsibility

There is an argument that seems to be emerging from the pro-coal crowd that is gaining momentum—not because of its true, but because it sounds good.And there is a big difference.

Coal advocates are claiming that it is better for China to burn low-sulfur coal from Montana and Wyoming than it is for them to burn more polluting coal from their own reserves and elsewhere in China.Sounds like a good logical argument and it would certainly be if China and India’s economies were in a flat growth mode.But since they are both growing exponentially, then they are more likely to burn our coal reserves and their own in their suicidal sprint towards some mythical growth-based nirvana that does not exist and is unsustainable if it did.(Perhaps this is a task for Myth Busters to sort out?)

It is good to look deeply into the logic of this, but there is a fundamental question that all of us should also ask at some point: Why should China want to buy coal from the Powder River Basin in Montana and Wyoming in the first place?The answer is not because it is low in sulfur content and other pollutants, because why should they care?Pollution from their power and heating plants basically takes a week-long jet-stream ride with a lot of it landing on our shores and in our waters.

The more reasonable explanation to the above question is that our government—even in this time when revenues are constricted and debt growing—is selling coal from federal public lands to foreign and multi-national corporations at a price that makes it competitive with domestic coal prices in China and India.That might sound reasonable too until you add in the penny per short ton cost that accrues for every mile that coal travels to get to its destination.So, even with this substantial surcharge, it is still competitive.Why?

For those paying attention the obvious answer is the US is not charging enough for this citizen-owned resource.And while that might have been reasonable policy when our country was seeking rapid growth, thoughts of climate change were far removed, and nearly every state in the union did not have to issue mercury-related fish advisories, it simply is not even close to good public policy now.

We all need to get the word out on the above myth and do something about getting a fair price for our non-renewable resources.

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